Quote from: JayJuanGee on Today at 02:18:54 PM

Quote from: dragonvslinux on May 29, 2022, 04:02:43 PM

Quote from: OgNasty on May 28, 2022, 11:13:30 PM

The elevated long leverage mixed with the overhanging ETH locked in 2.0 and the mtgox coins are still keeping this market down.

I think this is simply trying to provide excuses for current price action. Although I hate to admit it, BTC has been highly correlated to stocks "risk assets" with have fallen dramatically this year.

Maybe I'm not looking in the right places, but I'm also not seeing much high long leverage right now, but more of a balance:

Longs vs Shorts:. https://www.coinglass.com/LongShortRatio
Liquidiation Data:. https://www.coinglass.com/LiquidationData
Futures: https://www.theblockcrypto.com/data/crypto-markets/futures

If anything, it seems that there is relatively low leverage right now, with futures volume currently at summer 2021 levels for example (<$2b as opposed to >$4b 6 months ago). Many positions already got liquidated earlier in the month, predominantly longs after breaking $30K but many shorts as well after the bounce from $25K level. Most won't want to short in oversold conditions, others don't want to long without confirmation of a low.

As for ETH locked in 2.0, I find it highly irrelevant, many of those longer term investors will eye up the opportunity to rotate back into Bitcoin I imagine, anticipating BTC to recover much faster than any altcoins (which has always been the case so far). While MtGox coins that may be released later this year, or in 2024, sure it could spook some investors, but this has been the case for over a year already. Yawn.

Quote from: OgNasty on May 28, 2022, 11:13:30 PM

The support at $28K is looking more and more exhausted as it continues to be tested. I think there's a strong likelihood that the price will retest the recent lows in the $26K range. Hopefully that will liquidate some of the long leverage and bring the market into a healthier position to begin building support for the next wave of BTC to crash down onto it.

I agree that $28K is looking exhausted, even if bears are losing momentum after 9 weeks of selling. So re-testing $26K does "look" relatively likely at this point. But this can go either way based on current leverage data. Dropping below $28K would liquidate longs and likely re-test mid $20Ks, but moving above $30K-32K would otherwise liquidate shorts, pushing prices back into the mid $30Ks. Even if we are admittedly closer to breaking down than bouncing back to the upside. But I do agree it'd be healthy to build support at such oversold levels if that happens, better to drop asap than later with price no longer oversold.

It's the sort of "coin flip" scenario that unless you are trying to trade a risky break-out in either direction, then you'd likely be better off in both short & long positions with high leverage and simply trade the volatility instead. Given how degenerate the strategy of being both long and short with high enough leverage to make it worthwhile is, I'm not surprised there's low leverage in the market right now, due to lack of oppounrtity.

The on-chain data also suggests that 6-12 month holders who dumped 50% of their bags over the past 6 months are close to running out of Bitcoin to sell. Meanwhile, the 1 year+ holders (in particular 1-2 year holders) seem completely unphased by the drop from $69K. Notably the 6-12 months holders have now either dumped or become 1+ year holders since 6 months ago, even after buying in the mid $30K range. Hence why if not obvious the 6-12 month hodlers have dropped from 20% to 10%, while the 1 year hodlers have risen from 10% to 20%. Half of them dumped, the other half held basically, price dropped in half.

For reference sake, the volume data shows that 1-2 year hodlers predominantly bought at $10K as opposed to $30K or $60K (May 2020 - May 2021). So price will probably need to drop below $20K to shake these strong hands out the market. Returning to $25K or the 200 Week MA likely won't achieve much. After all, most bought BTC post-havling in the $10K-12K range, I imagine for the long-term as well.

https://www.lookintobitcoin.com/charts/hodl-waves/
https://www.lookintobitcoin.com/charts/1-year-hodl-wave/

In the past day or so I have been reflecting on BTC's somewhat gradual movements towards the UPpity, and in that regard, I appreciate the above fairly-detailed (at least point by point @ dragonvslinux) attempts at rebutting some of the seeming "inevitably downity" talking-points that OgNasty had come out with - and surely it is not the first time that I had seen some forum members presenting a variety of points proclaiming very high odds to DOWNity that seem to be attempting to create the impression that down is inevitable - when many of us know that inevitability in bitcoin is far from something that any of us should be relying upon, even if it seems that various cards are being stacked against King Daddy.

For sure many became too bearish once $30K broke, expecting that the 200 Week MA must next be tested after a higher low structure was broken, but as you like many others know, nothing is a guarantee in the world of Bitcoin. I too thought it was the most likely scenario, with strong chance or a capitulation wick even lower, but as soon as the buying pressure arrived at $25K taking prices to $29K, it seemed pretty clear that not everyone was waiting around for the "perfect price". I referenced this here in the topic "Was $25K the bottom?", based on the fact that for sure it could be even if seemed like the worst was yet to come. Until price is back above $40K I won't be that convinced that $25K was the low, but for now remain neutral with slight bullish bias.

Quote from: JayJuanGee on Today at 02:18:54 PM

It seems that even in a few of my earlier responsive posts (here's an example of one of them) I had conceded that the evidence of DOWNity was appearing quite strong based on the seemingly record number of Bitfinex longs that were shown on the chart linked therein.... so in that regard, I was starting to consider that it would be hard to go up if there were so many (an apparent record number of) leveraged longs on Bitfinex.....

I had not exactly been clear in my own ways to attempt to analyze the information, including whether such leverage longs were reflective across other exchanges or even counter-balanced by other factors.

I stopped paying much attention to Bitfinex longs/shorts to be much honest, traders are always horrifically long on that exchange. The fact the ratio is 40:1 isn't as concerning as it might seem (or concerning at all)
Notice how their long to short ratio has been above 1:1 since 2019. Even during the covid crash there were still more longs than shorts! Coincidence? I think not.

I can only assume there are long-term positions here, sub $3K, maybe even sub $1K, and/or generally lower leverage being used for longer-term positions. Either way, compared to the rest of the market, it's completely unrepresentative of the overall leverage in the market. That's why I now look at coinglass, rather than blockchain whispers that only shows 3 leverage exchanges, while these days there are dozens, and Bitfinex always sitting around 95%+ long while otherwise are close to 50%. Probably the reason for Bitfinex such high long leverage is because traders have done well using it over the years.

In summary, this isn't 2017/2018 anymore whereby Bitmex and Bitfinex dominate the leverage market. There are already a handful of exchanges with more volume. It's like looking at Bitstamp for volume these days, you won't much high volume there anymore, because there has been declining volume on that exchange for years now in favour or the newer exchanges.

Quote from: JayJuanGee on Today at 02:18:54 PM

I know that there was another point that I was considering that the BTC price could still go UPpity, in spite of leveraged longs because there are also incentives for some of the bullwhales to reck the bearwhales based on what is likely to be an ongoing existing practice of leverage (and likely non-backed - aka naked) shorts that they maintain through a variety of bitcoin futures products... and in that regard, it seems that some day, their reckoning is going to come.**

Exactly, also bare in mind that shorts normally get liquidated near the lows, longs usually get liquidated near the highs. Like in May 2021 when the market was over-leveraged long and price capitulated, or in in 2019 when the market was over-leveraged short during the bear market so the price just continued rallying all the way up to $14K. $6K-$8K should of act as some of resistance back then, but too many traders had shorted that range so the cascade of liquidations instead sent prices much higher, liquidating fresh shorts along the way as well. Some people were genuinely trying to short Bitcoin to $0 it seemed.

Overall, many people are stuck in some 2017-2018 mindset, because they've experienced a cycle or two and that was the most recent one. Better to shift to a 2021-2022 mindset to keep up to date Wink